Investors have been waiting nearly 20 years for Amazon to become a company that reliably turns a profit. Now that moment is finally here, and it wasn't worth the wait.

Amazon reported earnings for its holiday quarter on Thursday, and Wall Street greeted them with all the enthusiasm of a retail store shopper being asked to pay full price, pushing its shares down more than 10 percent in after-hours trading. Both its net income and revenue figures missed analysts' estimates.

Quarterly Revenue Growth Rate

22%

The news wasn't all bad. The rate of revenue growth slowed a bit from the three months ended in September but was still an impressive 22 percent. Amazon's operating profit margin was plump by Amazon standards at 3.1 percent, a level it hasn’t reached in years. Revenue increased at a quicker rate than operating costs for the fifth consecutive quarter.

Slower Growth, Still Puny Profits

Amazon over the holidays made more profit from each dollar of sales, but its sales growth slowed from the prior quarter.

Source: Bloomberg

But a holiday quarter like this one was not what Amazon investors had hoped for after subsidizing a decades-long expansion and waiting out a string of red ink or puny profits. Now the company has visible but still meager profits and good but not enthralling growth.

People in business and tech circles love to joke about how Amazon never makes money. (Admittedly, these are humor-challenged crowds.) It’s true that CEO Jeff Bezos has made a deliberate choice for years to plow nearly every free dollar he can find back into his company to expand into new territory, bulk up his advantage over rivals in areas like warehouse sorting and shipping and introduce gadgets like the Kindle or Prime shopping club to make customers want to shop only at Amazon, always and forever.

This was envisioned as the start of reaping the profits from Bezos's investments. Amazon has now turned in real life, generally accepted accounting principles net income for 10 of the last 16 quarters. Amazon optimists hoped for a sudden profit tidal wave, and instead they got a profit drizzle. The big question is: Did Amazon’s spending restraint go too far and start to take a toll on growth?

Consider the company’s cloud computing operation, Amazon Web Services. Revenue reached $2.4 billion, about 69 percent higher than sales in the period a year earlier. AWS remains a young business, and sales continue to be impressive. The growth rate slowed from the two previous quarter, however. AWS's operating income margin did grow again to a plump 29 percent, a sign the company is settling comfortably into its role as a dominant cloud computing company.

Cloud Power

The AWS cloud business is responsible for 7% of Amazon's sales, yet it generated nearly 40% of the company segment operating profit in the fourth quarter.

Source: Amazon filings

AWS now has the same advantage as Amazon does in online retailing: People assume it’s the best and the cheapest, and so turn to it first. Remember, through, that investor enthusiasm for Amazon is based in large part on this business sprouting like a weed. It's easy to imagine investors would gladly trade lower AWS profit margins for faster revenue growth.

The future almost never measures up to our expectations. Where are those jet packs and hoverboards we were promised? It looks as if Amazon investors will have to keep waiting on that elusive profitability.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.